Employers today are facing a barrage of Fair Labor Standards Act () lawsuits alleging that they’re misclassifying as exempt.
One main target: store managers who often work 60 to 70 hours per week for a set salary. Since much of their time is spent working side-by-side with hourly staff, helping serve customers and cleaning up, these employees are claiming that they are nonexempt workers due overtime pay.
The stakes are high. Misclassified managers can be eligible for two years’ worth of back wages (three if the violation was “willful”) at 1.5 times the hourly rate, plus liquidated damages equal to the unpaid wages. That means store managers can collect up to three times their regular rate.
The key to avoiding such FLSA lawsuits: a careful analysis of managers’ actual job duties (not their titles).
For managers to truly be exempt, they must do more than work the floor. Their duties should include tasks that rely on discretion and independent judgment and are clearly related to , not just serving customers.
But, as a new ruling shows, exempt managers still can spend a good portion of their time performing tasks that look like hourly work, as long as their “primary” duty is management.
Recent case: Kevin Keevican and Michael Terrazas were exempt Starbucks store managers working between 55 and 70 hours per week.
They sued, alleging they should be nonexempt employees who were due overtime. Both estimated they spent up to 80 percent of their time making drinks, running the register and cleaning. But they also were responsible for the overall success of the stores, plus they ordered inventory, hired other baristas and scheduled employees.
The court dismissed their cases, concluding that working side-by-side with their subordinates didn’t mean they, too, were automatically hourly employees. Their primary function was still management. (Mims, et al., v. Starbucks, No. H-05-0791, S.D. TX, 2007)
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.
The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/2341/working-alongside-staff-wont-erase-managers-exemption "